Resolution No. 82331
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RESOLUTION NO. 8233
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF
SELF -FUNDED RENEWAL TERMS AND CONDITIONS BY AND
BETWEEN THE CITY OF VERNON AND UNITED OF OMAHA LIFE
INSURANCE
WHEREAS, the City of Vernon has agreements with United of
Omaha Life Insurance Company ("Omaha") for administering the City's
employee health care plan; and
WHEREAS, on November 12, 2002, the Finance Committee
considered the recommendations of Bruce V. Malkenhorst, Director of
Finance, dated November 7, 2002, that the City approve the renewal
package for medical/dental/life insurance renewals from Omaha-PPO
Program -fox 2003; and
WHEREAS, Omaha has requested that the City sign a Self -
Funded Renewal Terms and Conditions form (the "Renewal") for the
period January 1, 2003 through December 31, 2003, prior to
memorializing any amendments to its Master Stop Loss Policy and
Administrative Services Agreement; and
WHEREAS, in order to meet the urgent need to continue its
medical, dental and life insurance benefits for its employees, the
City Administrator executed the Renewal with Omaha dated June 18,
2003, subject to ratification by the City Council; and
WHEREAS, on June 24, 2003, the Finance Committee considered
the recommendation of Bruce V. Malkenhorst, Director of Finance, dated
June 19, 2003, that his execution of the Renewal be ratified; and
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsection (a) of
1 Section 2.27 of the Vernon City Code, it is in the public interest and
2 necessity to ratify entering into the Renewal with Omaha, to enhance
3 services provided to the Vernon community.
4 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
5 CITY OF VERNON AS FOLLOWS:
6 SECTION 1: The City Council of the City of Vernon hereby
7 finds and determines that the recitals contained hereinabove are true
8 and correct.
9 SECTION 2: The City Council of the City of Vernon hereby
10 approves and ratifies the execution of the Self -Funded Renewal Terms
11 and Conditions with Omaha, a copy of which is attached hereto as
12 Exhibit "A" and made a part hereof.
13 SECTION 3: The City Clerk of the City of Vernon shall
14 certify to the passage of this resolution, and thereupon and
15 thereafter the same shall be in full force and effect.
16 APPROVED AND ADOPTED this 25th day of June, 2003.
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19 EONIS C. MALBVRG, Ma or
20 ATTEST:
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23 BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8233, was duly adopted by the City Council of the City of Vernon at an
adjourned regular meeting of the City Council duly held on Wednesday,
June 25, 2003, and thereafter was duly signed by the Mayor of the City
of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
- 3 -
EXHIBIT
VA&
06/19/2003 09:23 FAX 323 581 7924 CITY OF VERNON J LEHR 0001
SELF -FUNDED
RENEWAL TERMS AND CONDMONS
Policyholder Name City of Vernon
Policy Number(s): 00002RO5
Renewal .Plate: January 1, 2003
The "owing are the terms ofyour 12-month.jenewal ei%cdve Janmy 1, 2003:
Monthly Fees per Employee
Administrative Se"k=
Current Renewal +l-010
Medical ASO Fee $ 41.41 $ 39.34 -.5%
Dental ASO Fee $ 5,65 $ 5.65 +0%
Stop L4=
Specific Stop Loss. Current Renewal +/- %
Stop Lou Level $150,000 $ 200,000
Rate per Employee with or w&md Dependents: $ 54.28 $ 39.50-27.2°/a
Aggregate Stop Loss:
Aggregate Deductible Factor:
Employee with or without dependents-
$625.41
$829.76
+32.7
Aggregate Deducible Factors Buy -Up Plan
%
Employee Only
Employee and
Current N'umbcr of Employees
222
222
Minimum Monthly Aggregate Deductible*
S138,841.02
$ 194,206.72
+32.7
Minimum Annual Aggregate Deductr-bte
$1.666,092.24
$ 2,210480.64
oh
+32.7
Aggregate Stop Loss Premium Rate per Employee
$ 1,67
$3.27
+95.8
* The minimum monthly aggregate deductible is the mealiest possible liability for a mosnth during the Benefit Period
fDr losses under the plan. The monthly aggregate deductible will be the greater o:E
(a) the minimum monthly aggregate deducible listed above; or
(b) the aggregam dod uopble factor multiplied by the corresponding rnunber of Covered Employees and
Retirees under the plan for a given aaonth.
Please note that the final minimum monthly aggregate deductible factor wt71 be based on the actual corellment in the
plan on the renewal effwtive date. Any applicable aggregate stop loss reambsntsement will continue to be performed
at year-end (tbe policy does not provide a monthly reimbursement).
The specific stop loss renewal policy will be applicable to medical and prescription drug coverage.
The Agregate stop loss renewal policy will be applicable to medical, pmScription drug coverage.
Page I of I
06/19/2003 09:23 FAX 323 581 7.924 1 CITY OF VERNON -► J LEHR . 1@002
The spxiiie and aggregate stop loss rexrewal policy will apply to claims mcun-ed on or after 12:O1a m on 1/1/2003
and before 12;01 am. on 12/31/2003, and paid on or after 12;01 am. on 1/1/2003 and before 12;01a.m. on
12131.12003_
Other Fees
Lbr XM Fees
Renewal tea
Ad&sb nmt
PPO Aeons Fee
$ 2.90
No Change
+00/0
Disease Mauagement Fee (All exapl )
$ 0.00
$ 0.00
+00/0
UR Program Fee
$ 2.40
$ 2.40
+0%
Other Conditions of Rmewad
The maximum number of days allowable for premium fee credit with regard to notification of inel;gble employees
or dependents will be changed from 30 days to 60 days.
TV accordance with the update of the Plan benefits and provisions to the new version, your PlaWs Utilization
Managt Agreement will be amended to include the following programs_
(a) S129da ge-d Services and Snnnlies Review — Reviewing the medical necessity of certain
proposed semces and supplies, including the review of Specialty Drugs and Medicines
as described in the Policy; and
(b) Ow Mot Surrocal Review — Reviewing the medical necessity of certain proposed
outpatient surgical Wv=h res. This progaam will replace the present Medical Procedure
Review program l
The Company has issued this renewal based upon current information regarding -
(a) the industry of the Plan Sponsor and the age, gender, occupation, earnings, location, and size of
the Plan Sponwes employee population; and
(b) laws, regulations and judicial and administrative orders and decisions affecting benefits, the cost
Of admivistration and the cost oflicalth care services.
Accordingly, the Company reserves the right to change the premium rates and/or fees on or after the date these is a
Change in any of the factors described in (a) or (b) above resulting lion or relating to:
(a) an ineresse in premium tax, guarantee or uninsured fiord assessment, or other governmental charge
based upon or related to premium;
(b) a merger or consolidation, or an acquisition or divestiture (through stock, assets or exchange) of
all or part of a business enterprise affecting the Plan SponWs employee population; or
(c) the enactment, iss mee, amendment, or enfor<oemmt of any law, regulations, judicial or
adul misttgtive order or decision, including, without limitation, any law allowing eourpetmg health
care providers to bargain collectively with health plans, insurance carriers or health maintenance
organizations.
In addition to the light to change the premium rates and/or fees in accordance with the preceding paragraphs, the
Company may change premium rates.
(a) any time after the most recent RataTee Guarantee Date shown in this Administrative Services
Agreement, or Stop Loss polity, provided the Company has given at least 30 days advance written
notice ofthe premium/fee gate increase;
(b) on or after the date there is a change in benefits or eligibility for benefits under the Plan; ar
(c) on or after the date there is an increase or a decrease of 10% or 100, whichever is less, in the
number of employees insured under the Plan.
Page 2 of 2
06/19/2003 09:23 FAX 323 581 7924 CITY OF VERNON -► J LEHR lao03
Tn order to provide continuous, rmiuternipted benefit payment services in accordance with your Plain
ms dt Conditions form must be signedprovisioms, this
Renewd Ter
prior to January 1, 2003.
These conditions are hereby agreed to and, accepeed by:
City of Vernon DNITRD OF OMAHA LIFE
INSURMU COMPANY
By; Llo—e�z� By-.
Cit Actainistrator
Title
J 8
Date
Page of
We President — Group Underwriting
Title
September 25, 2002
Date
SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
Finance Committee
City of Vernon
Honorable Members:
EDUARDO OLIVO
\02
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
CITY HALL BRUCE W. OLSON
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 Police Chief
TELEPHONE (323) 583-8811 FAX: (323) 826-1481
June 19, 2003
In November 2002, this legislative body recommended to City Council to
approve the renewal terms and conditions for the Medical/Dental/Life
Insurance from United of Omaha to be effective January 1, 2003. On
June 18, 2003, the Risk Manager provided the "Self Funded Renewal
Terms and Conditions" from United of Omaha for execution. It is
hereby recommended that said document be approved and ratified.
Very truly yours,
Bruce V. Malkenhorst
Director of Finance
BVM/gm
J
Crla1' COWNC1L
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
Finance Committee
City of Vernon
Honorable Members:
CITY HALL
4305 SAWA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
November 7, 2002
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON ---
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
�N
The below listed are the proposed rates for the Medical/Dental/Life
Insurance Renewals from United of Omaha for the period of January 1,
2003 through December 31, 2003:
• Life Insurance rates will remain the same -
Life Insurance .32/$1000
AD & D .04/$1000
Dependent Life .38 per person
• Mrter-Stop Loss Policy from $54.28 to $39.50 EE/MO
• Medical Insurance form $41.44 to $39.34 EE/MO
• Deductibles to be increased to $500.00 per person and $1,000.00 per
family.
• The Utilization Management Fee to remain the same - $2.40 BE/MO
Z'O(D
• The PPO Access fee to remain the same- $2�. EE/MO
• Dental Insurance to remain the same - $5. EE/MO
United of Omaha
Page 2
The minimum Annual Deductible for the proposed plan is approximately
$2,302,049.00. This has been reviewed by the Risk Manager and it is
hereby recommended that the renewal package for Medical/Dental/Life
Insurance Renewals from.Mutual of Omaha - PPO Program for 2003 be
approved.
Very truly yours,
v
Bruce V. Malkenhorst
Director of Finance
BVM/gm